Sent: 22-04-2008 11:54:01
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2020 Summit, CGT and more
A few issues this week.
a. Capital Gains Tax
In the US Presidential election campaign, Mr Barrack Obama is suggesting that the US CGT rate should be increased. He has said that we wants to increase the amount of tax paid by the rich.
Some people have responded to his policy by pointing out that just under 80% of US citizens who paid CGT earn less than $100,000.
This got me thinking about Australia's CGT and how many people on less than $100,000 pay this tax.
I checked out the figures for 2004/05. 90% of individuals declaring capital gains had taxable income (obviously not a real indicator of income) of less than $100,000 had capital gains. These people paid 30% of all the CGT paid that year.
Those with taxable income of between $100,000 and $500,000 made up 9% of CGT paying taxpayers. These people paid 32% of the total CGT paid.
The balance of taxpayers -- ie 1% paid 38% of the CGT raised.
This leads onto my next point.
b.Having reviewed the documents issued from last weekend's 2020 summit my impressions that that not new or startling ideas have been created.
If you want to waste sometime read the documents for yourself.
We had the call for 'comprehensive tax reform' and a republic. Whoopee. More change for changes sake.
Just wait for someone to be silly enough to suggest that the CGT rate should be increased to the tax reform 'inquiry'..
I recently read this quote from an email sent from Stefan Abrams who is a managing partner at Bryden-Abrams Investment Management and is described as a 'Wall Street veteran who knows a thing or two about the markets': "As large, multinational industrials come through with good first quarter results and encouraging guidance going forward; as stocks that miss no longer get crushed, as the market shakes off bad macro news, most of which is redundant, as the rates of contraction in various sectors begin to level off, as the stimulus package approaches, as the massive amount of cash on the sidelines starts bargain hunting, etc.,etc., your cast of permabears needs to find some new reasons to ignore this emerging bottom for equities."
Someone else might say, 'The market does what the market does. You're a fool if you try to fight it.'
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